UPS Brexit Webcast Provides Updates

2020 UPS® Tradenomics Webcast Series
Brexit – The Next Steps
March 12, 2020
Today’s webcast will begin shortly

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
U.S. Export Compliance
Presenters
Greg Maddaleni, LCB, JD Customs Brokerage Sr. Manager
UPS Customs Brokerage
Host
Salima Gasmi, Customs Compliance Manager
UPS Customs Brokerage
Panelist
Walter van der Meiren, Customs Brokerage Director
UPS Customs Affairs
Panelist

2020 UPS® Tradenomics
Webcast Series
3
Previous (recording available)
• February 6 - U.S. Export Compliance Year in Review
Upcoming (more to be scheduled)
• March 12 – Brexit Update
• April 15 – USMCA – Transitioning the new free trade agreement
• May 20 – U.S. Trade Policy and Trader Implications
Link to registration and recordings: http://bit.ly/2020Tradenomics
Dates subject to change

This presentation will be available upon check out to all attendees
as well as a link to the event recording.

This presentation is for informational purposes only.
It does not constitute legal advice - please consult with your own legal
counsel for such advice.
Do not rely on this information without performing your own research.

Agenda
6
Any questions?
Ask our panelists
using the “Q&A”
function
1 CCS/CES/MES
Credit
• Introduction
• Current Status
• What will change
• The road to a new partnership
• How you can prepare
• How UPS is preparing

© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. 7
• Introduction
• Current Status
Agenda

8
Introduction
Current Status
What will change
The road to a new partnership
How you can prepare
How UPS is preparing
Introduction
Brexit
The United Kingdom’s
(UK) withdrawal from
the European Union
(EU) will impact supply
chains across Europe
and around the world.
SMEs
SME’s make up a large
share of our customer
base as they don’t have
the capacity or specific
expertise for in-house
logistics
UPS
41 000 employees in
mainland Europe and a
further 8 000 in the UK
facilitating frictionless
trade.
Businesses
Operating in a time
sensitive industry either
by design, customer
preference, or industry
requirement.

• Introduction
• Current Status
Agenda

Revised Protocol
Revised Withdrawal Agreement
Revised Political Declaration
The Transition Agreement
Milestones
Introduction
Current Status
What will change
How you can prepare
January 31, 2020: The UK is no a longer a member State of the
European Union
Agreements between the
UK and the EU
ratified by their Parliaments
Current Status
Revised Protocol
Currently, the UK and the EU are in a transition phase where there is
no impact to the movement of goods

Revised Protocol
This solution responds to the unique circumstances on the island of Ireland with
the aim of protecting peace and stability.
 A legally operational solution that:
o Avoids a hard border on the island of Ireland
o Protects the all-island economy and the Good Friday
(Belfast) Agreement
o Safeguards the integrity of the Single Market
 All other elements of the Withdrawal Agreement remain
unchanged, as per the agreement reached on 14
November 2018:
o Citizens' rights
o The financial settlement
o A transition period at least until the end of 2020
o Governance
o Protocols on Gibraltar and Cyprus
o Other separation issues
Revised Protocol
Milestones
Introduction
Current Status
What will change
How you can prepare

12
Revised Protocol
Milestones
Introduction
Current Status
What will change
The road to a new Partnership
How You can prepare
Northern Ireland will remain aligned to a limited set of rules related to the EU's
Single Market in order to avoid a hard border:
 Legislation on goods
 Sanitary rules for veterinary controls
 Rules on agricultural production/marketing
 VAT and excise in respect of goods
 State aid rules
Regulatory
 No customs border on the island of Ireland
 Northern Ireland remains part of the UK's customs territory
Customs
 Members of the Northern Ireland Assembly will have a decisive voice on the
long-term application of relevant EU law in Northern Ireland.
Consent

13
A model based on a Free Trade Agreement (FTA)1
Ambitious FTA with zero tariffs and quotas
between the EU and the UK2
Open and fair competition3
The precise commitments will
be proportionate with the
ambition of the future
relationship and take economic
connectivity and geographic
proximity into account
Greater scope for regulatory
divergence than previous agreement4
In the area of Goods,
the declaration envisions:
The non-legally binding
framework for the future
relationship between the
European Union and the
United Kingdom
Revised Protocol
Milestones
Introduction
Current Status
What will change
How You can prepare

14
UK will remain within EU Customs Union and single
market
UK will lose the ability to take part in EU law making
Revised Protocol
Milestones
Introduction
Current Status
What will change
How You can prepare
The transition period will last from 31 Jan 2020 until 31 Dec 2020

15
Jan 1st, 2021
• Start of Free
Trade
Agreement or
• Hard Brexit or
• Extension until
31st Dec 2021
Jun 30th, 2020
• Deadline to
potentially
extend the
transition period
until 31st
December 2021
Jan 31, 2020
• UK withdrawal
Revised Protocol
Milestones
Introduction
Current Status
What will change
How You can prepare
Milestones
Here are the key upcoming dates of the process
FTA negotiations

• Introduction
• Current Status
Agenda

Citizens European Union Schengen Area Euro Zone
Before Brexit 514,292,912 83% 67%
After Brexit 447,206,135 95% 77%
17
Protocol on IE and NI
UK as Gate to Europe
What will happen on 1/1/2021
Import tariffs
Non tariff
Rules of Origin
EU VAT Reform
VAT collection on low value goods
Digital platforms & non-EU marketplaces
Procedures across the withdrawal dates
EU before and after Brexit
Introduction
Current Status
What will change
How You can prepare
Source: Eurostat
Europe before and after Brexit

FTAs
Already
Negotiated
18
FTAs
on the
Agenda
Import tariffs
Non tariff
Introduction
Current Status
What will change
How You can prepare
Rules of Origin
EU VAT Reform
What is the status of UK free trade agreements?
Andean
Countries
South
Korea
Switzerland
Central
America
Israel
Southern
African
Countries
Norway &
Iceland
Morocco
Chile
Eastern
African
Countries
Japan
United
States
Australia
New
Zeeland

19
Import tariffs
Non tariff
Rules of Origin
EU VAT Reform
Introduction
Current Status
What will change
How You can prepare
What will happen on 1st January 2021
EXTERNAL BORDER
TRADE BARRIERS
LONGER LIFECYCLE OF SHIPMENTS
OTHER REQUIREMENTS
 No access to Single
Market
 Restrictions and
controls
 Customs declarations
between the EU & the
UK
 Two different customs
Tariffs
 Preferential origin
 Customs duties
between the EU and
the UK
 Import / Export
formalities in UK
 Import / export
formalities in EU
 Customs
Warehouses
 Authorizations
 Bill of Discharge
 Guarantees

20
Import tariffs
Non tariff
Introduction
Current Status
What will change
How You can prepare
Rules of Origin
EU VAT Reform
EU Protocol on Ireland and Northern Ireland
Examples of trade flows: customs and regulatory checks
Great Britain to Northern Ireland
LIVERPOOL
BELFAST
Exit modalities/formalities (if any) for UK to
determine
EU import formalities (including entry
summary declaration and customs
declaration) and checks
Relevant authority
• UK authorities will apply relevant EU rules
• EU institutions have oversights as today.
• EU Reps can attend checks and direct the UK to carry them out
Product Safety checks & controls
• Live animals, animals products, plants, SPS: checks at entry point
• Industrial products: risk-based checks at entry point
Tariffs
• EU tariff: if good is subject to commercial processing or at risk of
entering the EU
• No tariff: if good is not subject to commercial processing and not at risk
of entering the EU
Other
• EU legislation on VAT and excise applies
LIVERPOOL
BELFAST

21
Import tariffs
Non tariff
Introduction
Current Status
What will change
How You can prepare
Rules of Origin
EU VAT Reform
EU Protocol on Ireland and Northern Ireland
Examples of trade flows: customs and regulatory checks
Northern Ireland to Great Britain
EU export formalities / pre-departure
declaration
Entry formalities (if any) for UK to determine
in accordance with the international
obligations (WTO, FTAs, etc…)
LIVERPOOL
BELFAST
LIVERPOOL
BELFAST

[Insert file name] 22
Import tariffs
Non tariff
Rules of Origin
EU VAT Reform
Introduction
Current Status
What will change
How You can prepare
Using the UK as gate to Europe – Before and after Brexit
Before Brexit
Procedure 4200
Import of the non-EU commodities into the European Union with consolidated
clearance in single country with subsequent delivery of these commodities to
some other EU country, also called the intra-Community supply with import
VAT deferment.
• during the release of the shipment for free circulation, the Importer does not
pay import VAT,
• the VAT debt occurred during the customs procedures is later settled by the
Importer in the country of final destination - cash flow advantage,
• easier purchase procedures in the case of resale of the goods,
• opposite to the transit procedure, the Client’s customer is released from any
customs obligations, acquires cleared shipment, ready for immediate use.

23
Introduction
Current Status
What will change
How You can prepare
As of 1/1/2021
For Exports from the US to the UK with subsequent delivery to the EU 27:
 Shipments with UK as end destination will be cleared in the UK
 Shipments with destination EU Member States will have to be send in Transit
o These shipments need to be cleared in the EU member state
Pre-requisites for shipping will be:
o EORI Registration
o VAT numbers
o Customs representation in both UK and EU 27
What changes?
Currently
Shipments to the EU can be:
 Sent to the UK
 Customs cleared in the UK and
 Distributed without customs formalities to any EU 27 member state

24
Types of Tariffs
Bound
Most
Favored
Nation
(MFN)
Preferential
Tariffrate
3.5%7.0% 0.0%42032990
Gloves of leather or
Composition Leather
Preferential rate
(China)
COMMODITY
MFN
Example:
Preferential rate
GSP scheme (excl. India
& Indonesia)
Import tariffs
Non tariff
Rules of Origin
EU VAT Reform
Introduction
Current Status
What will change
How You can prepare
Import tariffs

25
Definition Within the EU After Brexit
A non-tariff barrier is any
measure, other than a
customs tariff, that acts as a
barrier to international trade.
These include:
• Regulations
• Rules of Origin
• Quotas
With the UK leaving the EU,
trade costs could possibly
rise, because tariffs as well
as non-tariff barriers may be
implemented
EU has reduced its non-
tariff barriers to trade for
all his Member States to
create a single market.
• A trade deal would not be reached in the short
term and, in the interim phase, WTO regulation
would apply. In addition to non-tariff barriers,
the EU would then impose tariffs on British
exports, as it does on the United States.
• The free trade deal would not create tariff
barriers with the EU but UK could still face a rise
in non-tariff barriers due to necessity to comply
with rules of origin and potential anti-dumping
charges.
Possible Scenarios
Import tariffs
Non tariff
Rules of Origin
EU VAT Reform
Introduction
Current Status
What will change
How You can prepare
Non tariff
Which non tariff measures might apply in the new UK-EU relationship

26
How will rules of origin affect
UK-EU trade post-Brexit?
What about other trade
partners?
Preferential rules of
origin
Non-preferential rules of
origin
The Regional Convention on
pan-Euro-Mediterranean
preferential rules of origin
(PEM Convention)
There are also other
countries like South Korea
that are not part of the
convention with which the
UK, through the EU, has Free
Trade Agreements
Import tariffs
Non tariff
Introduction
Current Status
What will change
How You can prepare
Rules of Origin
EU VAT Reform
Rules of origin
Rules of origin are the criteria needed to determine the national source of a
product – determining the duties and restrictions

27
 A movement of goods which has started before the end of the transition period and ends thereafter
shall be treated as an intra-Union movement regarding importation and exportation licensing
requirements in Union law.
 The proof of the start of the movement shall be provided by means of a transport document
relating to the goods.
 For goods carried by air and have been loaded or transshipped at an airport in the customs
territory of the UK for consignment to the customs territory of the EU or vice-versa, shall be carried
under cover of a single transport document, provided that the movement by air started before the
end of the transition period and the movement ended thereafter.
Union Status of Goods
 Entry summary declarations that were lodged at a customs office of first entry before the end of
the transition period shall produce the same legal effects in the customs territory of the Union and
the customs territory of the United Kingdom after the end of the transition period.
Entry summary declaration
 Pre-departure declarations that were lodged before the end of the transition period shall produce
the same legal effects in the customs territory of the Union and the customs territory of the United
Kingdom after the end of the transition period.
Pre-departure declaration
Import tariffs
Non tariff
Introduction
Current Status
What will change
How You can prepare
Rules of Origin
EU VAT Reform
Procedures across the withdrawal
dates
Customs procedures for goods picked up before the
withdrawal but presented at the border of the EU after

28
Currently
• Shipments with an intrinsic value below 22 Euro are:
o exempt from VAT
o released through a declaration by any other act
(manifest)
• VAT exemption is waved for all shipments with an
intrinsic value below 22 Euro
• For shipments with an intrinsic value below 150 Euro
(B2B and B2C), a new process will be implemented:
 Responsibility for the shipper to register
and process VAT payment
 Declarant on import will process
shipments at the first Point of Entry
through a super reduced data set
As of
Jan 1st 2021
Import tariffs
Non tariff
Rules of Origin
EU VAT Reform
Introduction
Current Status
What will change
How You can prepare
EU VAT Reform
What changes?

29
Import tariffs
Non tariff
Introduction
Current Status
What will change
How You can prepare
Rules of Origin
EU VAT Reform
It will be possible to process VAT payments by:
• Using the Import Scheme/Import One Stop Shop (IOSS)
special scheme for distance sales of goods imported from third
countries or third territories.
Note: The use of IOSS is not mandatory.
Both simplifications for the collection of import VAT mentioned above are optional, but incentives,
in the form of customs facilitations, will be available to encourage businesses to use them.
When traders do not avail themselves of these simplifications, the importation will take place
using the current more burdensome standard customs procedures..
VAT collection on imported low value goods
Together with the removal of the import VAT exemption for low value goods, the
new VAT rules introduce two possibilities to collect the import VAT
• Using the special arrangements for declaration and payment
of import VAT, available to declarants for imports of low value
goods destined to consumers in the EU. These can be applied
when the IOSS is not applied and They are typically designed for
postal or courier operators.
Note: The use of the special arrangements is not mandatory..

30
Fast-track customs clearance procedures
Options to minimize risks of double taxation
Options to facilitate VAT adjustments and corrections including for returned goods
Reduce costs and risks of administration for tax authorities
Reduce the compliance burden for underlying suppliers, notably SMEs
Import tariffs
Non tariff
Introduction
Current Status
What will change
How You can prepare
Rules of Origin
EU VAT Reform
Digital platforms & non-EU
marketplaces
Compliance for digital platforms and non-EU marketplaces
collection on imported low value goods
EU will facilitate/encourage compliance by simplifying procedures and providing
additional incentives
Limit the intervention of customs authorities in tax collection and allow them to
focus on key tasks concerning the safeguarding of health and security

• Introduction
• Current Status
• The road to a new
partnership
Agenda

Rules of Origin
Legitimate
Trade
Effective
Measures
Customs
Procedures
Cooperation
Mutual
Recognition
EU priorities in the negotiations
Customs rules on ongoing movements
UK priorities in the negotiations
Introduction
Current Status
What will change
The road to a
new Partnership
How You can prepare
What should the Trade agreement look like?
EU Priorities
Alignment: looking for a level playing field from the regulatory point of
view (employment, environmental, tax (State aid) health & safety)

No tariffs, No
restrictions…
Rules of Origin
new protocol
Protection from
unfair trade
Regulatory
provisions
Specific sectors
EU priorities in the negotiations
Customs rules on ongoing movements
UK priorities in the negotiations
Introduction
Current Status
What will change
The road to a
new Partnership
How You can prepare
What should the Trade agreement look like?
UK Priorities
Divergence: not be too aligned to EU rules because this makes FTAs
with other countries more difficult (US, Australia…)

• Introduction
• Current Status
Agenda

35
Consolidate your shipments
Utilize Paperless Invoice
Assign HS codes to your products
Prepare proper Commercial Invoice
…And do it
as soon as
possible.
UPS World Ease
®
simplifies customs clearance by
grouping several shipments destined for the UK or
the entire European Union into a single shipment.
 Minimizes financial risk to enter the global marketplace
 No time spent on typical startup logistics
 Shortened supply chain
 Simplified paperwork
 Reduced Customs
 Enhanced cash flow
 Reduced inventory cost
 Full-visibility tracking
Tell us all about your shipments
Get prepared for the exceptions
Introduction
Current Status
What will change
How You can prepare
Consolidate Your Shipments

36
Utilize Paperless Invoice
Introduction
Current Status
What will change
How You can prepare
UPS World Ease after 1st January 2021
2 different shipments will need to be created
 UK volume and EU27 to be shipped separately
 Duty & VAT for the UK shipments will be paid in the UK
o Requisites: EORI & VAT ID in the UK
 Duty & VAT for the EU shipments will be paid in the EU
o Requisites: EORI & VAT ID in the EU
Import into the EU where part of
the volume is going to the UK
Import via the UK with distribution to
the other EU27 countries
Before After

37
UPS Paperless™ Invoice
enables customers to upload
the commercial invoice/invoice
data or other documentation
for international shipments
(while creating the shipping
label) in order to streamline
the customs clearance
process.
Minimise
loss of
documents
MASTER INVOICE
Sold to Address
COMMODITY
Faster
customs
clearance
Eliminates
redundant
data entry
Upload any
other shipping
documents
Visibility of
forms in
Quantum View™
software
Utilize Paperless™ Invoice
Introduction
Current Status
What will change
How You can prepare
Utilize Paperless ™ Invoice

38
Delays can be avoided if paperwork is correctly prepared
…and that all starts with the commercial invoice
• Single point of reference
• Basis for customs declaration
• Clearly shows the parties involved in
the transaction, origin and
destination, product tariffConsolidate your shipments
Introduction
Current Status
What will change
How You can prepare
 Content –
what is it, what is it made from
and, what will it be used for
 Quantity and weight of goods
 Value of the goods being traded
 Incoterm
 Harmonised tariff codes that apply to
those goods
…click here to access UPS’s free interactive guide
to completing your commercial invoice.

39
Reduced time span customs release
Reduced risk of hold
Harmonised Tariff Code System
Ensures correct duty and taxes are calculated
Skill of the broker is of utmost importance
How will
you
benefit?
In order to ensure a simplified, compliant on time
shipping, please provide your product database to UPS
Introduction
Current Status
What will change
How You can prepare
Assign Harmonized Tariff Codes (HS or HTS) to your products
HS codes are developed by the World Customs Organization (WCO) and used to
classify and define internationally traded goods

40
Your business can utilize the EU Guidance on acceptable and unacceptable terms for the
description of goods when importing into the EU.
Phone Apple iPhone-8, 4.7 Inch display 256 GB, Gold sprint
Clothes Men‘s Pima Cotton Crew Next T-shirt
Auto Parts Automobile Brakes, Windshield Glass for Automobiles
Equipment Oil Well Equipment, Poultry Equipment
Gifts Remote Control Cars
Sanitary goods Towels, Buckets, Detergents, Tooth brushes
Introduction
Current Status
What will change
How You can prepare
Acceptable goods descriptions

• Introduction
• Current Status
Agenda

42
Introduction
Current Status
What will change
How You can prepare
Our Advocacy
UPS proposal for the customs chapter
Security Standards
• Mutual recognition of
Authorised Economic
Operator (AEO) status;
• Complete waiver of
safety and security
information, similar to
current EU-Switzerland
and EU-Norway
relationship;
Mutual data recognition
• Identical data set
requirements for
customs declarations in
UK and EU;
• Acceptance of the
export declaration in the
EU as the import
declaration in the UK,
and vice-versa
• Acceptance EU
customs authorities of
UK customs
declarations, releasing
the goods and informing
UK customs, and vice
versa
• Advance electronic
submission and
processing of import
documentation and other
information, including
manifests, before
physical arrival of goods;
• Expedited customs
procedures for express
delivery shipments;
De minimis
• Shipments with an
intrinsic value below the
de minimis threshold
should be released
based on a limited data
set
• Increase of 'de
minimis' to 800 Euro
Others
• Self-assessment of
goods
• Transparent and non-
discriminatory fees,
charges, and customs
procedures;
• Advance rulings
relating to binding tariff
information, or decisions
relating to binding origin
information;
• Deferred tax and
duties payments, with
payment at quarterly
intervals or longer;
• Simplified rules of
origin and cumulation;

43
Contingency plans in place
Introduction
Current Status
What will change
How You can prepare
Network adjustments Licenses and Bank Guarantees
Product enhancements
to support GB as 3rd country
Staffing
Technology updates,
both internal and external
Training
UPS
What is UPS doing to prepare

Questions and Answers
Brexit: The Next Steps

Thank You For Your Participation
Stay Informed
Visit UPS’s dedicated Brexit page for European businesses, to test
your readiness and stay informed of the latest steps needed to
trade post-Brexit:
https://solutions.ups.com/gb-brexit.html
Educational Credits
NCBFAA: CES/CCS continuing education credits available
For more information contact Greg Maddaleni at
gmaddaleni@ups.com
Get In Touch
We are here to address any further questions you may have in the
coming weeks:
BREXIT@ups.com

UPS Brexit Webcast Provides Updates

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